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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One):
(X) Annual report pursuant to Section 15(d) of the Securities Exchange Act
of 1934 for the fiscal year ended December 31, 1999 or
( ) Transition report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 for the transition period from _______________ to
_______________
000-26994
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(Commission File Number)
ADVENT SOFTWARE, INC. PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
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(Plan Title)
ADVENT SOFTWARE, INC.
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(Plan Issuer)
301 BRANNAN STREET, SIXTH FLOOR
SAN FRANCISCO, CA 94107
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(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code:
(415) 543-7698
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ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
Financial Statements
Years ended December 31, 1999 and 1998
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Table of Contents
<TABLE>
<S> <C>
Independent Accountants' Report.............................................3
Financial Statements:
Statements of Net Assets Available for Benefits.............................4
Statements of Changes in Net Assets Available for Benefits..................5
Notes to Financial Statements...............................................6
</TABLE>
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To the Participants and
Plan Administrator of the
Advent Software, Inc.
Profit Sharing and Employee Savings Plan
INDEPENDENT ACCOUNTANTS' REPORT
We have audited the financial statements of the Advent Software, Inc.
Profit Sharing and Employee Savings Plan (the "Plan") as of December 31, 1999
and 1998, and for the years then ended, as listed in the accompanying table
of contents. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by the Plan's management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of
the Plan as of December 31, 1999 and 1998, and the changes in net assets
available for benefits for the years then ended, in conformity with generally
accepted accounting principles.
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 23, 2000
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ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------
1999 1998
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<S> <C> <C>
Investments, at fair value $13,334,297 $8,689,321
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Assets held for investment purposes 13,334,297 8,689,321
Employer's contribution receivable 477,529 406,235
Other payable (150,392)
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Net assets available for benefits $13,811,826 $8,946,164
=========== ==========
</TABLE>
See independent accountants' report and
accompanying notes to financial statements.
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ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
-----------------------------
1999 1998
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends and interest $ 37,016 $ 14,752
Net realized and unrealized appreciation
in fair value of investments 1,809,859 343,930
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1,846,875 358,682
Contributions:
Participants' 2,967,494 1,966,139
Employer's 447,647 405,734
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3,415,141 2,371,873
Total additions 5,262,016 2,730,555
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Deductions from net assets attributed to:
Withdrawals and distributions 841,111 632,591
Administrative expenses 13,611
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Total deductions 841,111 646,202
Transfers from other plans 445,757 256,552
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Net increase 4,866,662 2,340,905
Net assets available for benefits:
Beginning of year 8,945,164 6,604,259
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End of Year $13,811,826 $8,945,164
=========== ==========
</TABLE>
See independent accountants' report and
accompanying notes to financial statements.
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ADVENT SOFTWARE, INC.
PROFIT SHARING AND EMPLOYEE SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1999 and 1998
--------------------------
NOTE 1 - THE PLAN AND ITS SIGNIFICANT ACCOUNTING POLICIES:
The following description of the Advent Software, Inc. (the "Company")
Profit Sharing and Employee Savings Plan (the "Plan") provides only general
information. Participants should refer to the Plan document for a more
complete description of the Plan's provisions.
The Plan is a defined contribution plan that was established in 1988 by
the Company to provide benefits to eligible employees. The Plan covers all
employees of the Company except (1) employees covered by a collective
bargaining agreement (2) employees of affiliated employers who have not
adopted the Plan, or (3) independent contractors. Plan entry dates are the
first day of the Plan year and the first day of the seventh month of the Plan
year.
The Plan administrator intends that the Plan is currently designed and
operated in compliance with the applicable requirements of the Internal
Revenue Code (the "Code") and the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
ADMINISTRATION -
The Company has appointed an Administrative Committee (the "Committee")
to manage the day-to-day operation and administration of the Plan. A
third-party administrator processes and maintains the records of participant
data. Smith Barney Corporate Trust Company ("Smith Barney") acts as the
custodian and trustee of the Plan. Substantially all expenses incurred for
administering the Plan are paid by the Company.
BASIS OF ACCOUNTING -
The financial statements of the Plan are prepared on the accrual method
of accounting. Participants' contributions are recorded in the period during
which the Company makes payroll deductions from participants' earnings.
Employer contributions are recorded for the period declared by the Company.
Benefits are recorded when paid.
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INVESTMENTS -
Investments under the Plan are held by Smith Barney and invested
generally based on instructions received from participants. Participants may
elect to allocate their investments among seven pooled separate accounts or
the Advent Software, Inc. Common Stock Fund ("Advent Stock Fund").
Plan investments are valued at fair value, as measured by quoted market
prices. Participant loans are valued at cost, which approximates fair value.
INCOME TAXES -
The Plan has been amended since receiving its latest favorable
determination letter dated December 1, 1993. However, the Company intends
that the Plan is operated in accordance with, and continues to qualify under,
the applicable requirements of the Code and related state statutes, and that
the trust, which forms a part of the Plan, is exempt from federal income and
state franchise taxes.
ESTIMATES -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities, and
changes therein, and disclosure of contingent assets and liabilities. Actual
results could differ from those estimates.
RECLASSIFICATIONS -
Certain reclassifications were made in the 1998 financial statements to
conform with the 1999 presentation.
RISKS AND UNCERTAINTIES -
The Plan provides for various investment options in any combination from
among eight investment funds, each with a different investment goal and level
of risk. Investment securities are exposed to various risks, such as
interest rate, market fluctuations and credit risks. Due to the level of
risk associated with certain investment securities, there exists at least a
reasonable possibility that changes in returns in the near term would
materially affect participants' account balances and the amounts reported in
the statements of net assets available for benefits and the statements of
changes in net assets available for benefits.
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NEW ACCOUNTING PRONOUNCEMENT -
In September 1999, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position ("SOP") 99-3, "Accounting for and Reporting of Certain Defined
Contribution Benefit Plan Investments and Other Disclosure Matters." This
SOP eliminates the previous requirement for a defined contribution plan to
disclose participant-directed investment programs by fund. The Plan has
adopted SOP 99-3 in its financial statements for the years ended December 31,
1999 and 1998.
NOTE 2 - PARTICIPATION AND BENEFITS:
PARTICIPANT CONTRIBUTIONS -
Participants may elect to have the Company contribute a percentage, up
to 15%, of their eligible pre-tax compensation up to the amount allowable
under the Code. Participants who elect to have the Company contribute a
portion of their compensation to the Plan agree to accept an equivalent
reduction in taxable compensation. Contributions withheld are invested in
accordance with the participant's direction and are allocated to funds in 1%
increments.
Participants are also allowed to make rollover contributions of amounts
received from other tax-qualified employer-sponsored retirement plans. Such
contributions are deposited in the appropriate investment funds in accordance
with the participant's direction and the Plan's provisions.
EMPLOYER CONTRIBUTIONS -
The Company is allowed to make matching contributions as defined in the
Plan and as approved by the Board of Directors. In 1999 and 1998, the
Company matched 50% of the first $1,000 of each eligible participant's
contribution up to a maximum of $500. The Company's actual contribution may
be offset by certain available forfeitures, if any, during the Plan year.
The Plan also allows for a discretionary profit sharing contribution.
Discretionary contributions for the years ended December 31, 1999 and 1998,
were approximately $293,000 and $250,000, respectively.
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PARTICIPANT ACCOUNTS -
Each participant's account is credited with the participant's
contribution, Plan earnings or losses and an allocation of the Company's
contribution, if any. Allocation of the Company's contribution is based on
participant contributions or employee eligible compensation, as defined in
the Plan.
PAYMENT OF BENEFITS -
Upon termination, the participant or beneficiary may receive the
benefits in a lump sum amount equal to the value of the participant's vested
interest in his or her account, or annual, semiannual, quarterly or monthly
installments for a period which shall not extend beyond a participant's or
participant and designated beneficiary's life expectancy. The Plan allows
for automatic lump sum distribution of participant vested account balances
that do not exceed $3,500.
LOANS TO PARTICIPANTS -
The Plan allows participants to borrow up to the lesser of $50,000 or
50% of their vested account balance. The loans are secured by all or a
portion of the participant's vested balance. Such loans bear interest at the
available market financing rates and must be repaid to the Plan within a
five-year period, unless the loan is used for the purchase of a principal
residence in which case the maximum repayment period may be longer than five
years. The specific terms and conditions of such loans are established by
the Committee. Outstanding loans at December 31, 1999, carry interest rates
which range from 8.75% to 11%.
VESTING -
Participants are immediately vested in their salary deferral, employer
matching, rollover contributions and related earnings. Participants vest
ratably and are fully vested in the employer's profit sharing contributions
allocated to their account after six years of credited service (except in the
case of participants who originated from a merged plan). Participants become
fully vested upon death, attainment of normal retirement age or disability.
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NOTE 3 - INVESTMENTS:
The following table includes the fair values of investments and
investment funds that represent 5% or more of the Plan's net assets at
December 31:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Smith Barney:
Employee Benefit Deposit Account II $ 301,405 $ 450,575
Reserve Deposit Account 580,356 237,645
Ryan Labs Government Bond Index Fund 361,408 318,904
Oppenheimer Capital Value Equity Fund IV 2,597,295 2,456,591
Value Line Small-Cap Equity Fund V 2,872,310 2,017,857
Templeton International Value Equity Fund IX 2,623,165 1,753,334
Advent Software, Inc. Common Stock Fund 1,086,821 286,235
GSA Socially Responsible Fund 1,378,026 692,389
S&P Equity Index Fund 1,324,637 292,317
Participant Loans 208,874 183,474
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Assets held for investment
purposes $13,334,297 $8,689,321
=========== ==========
</TABLE>
The Plan's investments (including gains and losses on investments bought
and sold, as well as held during the year) appreciated in value as follows:
<TABLE>
<CAPTION>
Years ended December 31,
1999 1998
---- ----
<S> <C> <C>
Common stock $ 455,734 $105,392
Mutual funds 1,354,125 238,538
---------- --------
$1,809,859 $343,930
========== ========
</TABLE>
NOTE 4 - PARTY-IN-INTEREST TRANSACTIONS:
Certain Plan investments are mutual funds managed by an affiliate of the
Plan trustee, a party-in-interest under ERISA. Any purchases and sales of
these funds are open market transactions at fair market value. Such
transactions are permitted under the provisions of the Plan and are
specifically exempted from the prohibition of party-in-interest transactions
under ERISA.
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As allowed in the Plan, participants may elect to invest a portion of
their accounts in the common stock of the Company. Aggregate investment in
Company common stock at December 31, 1999 and 1998 was as follows:
<TABLE>
<CAPTION>
Date Number of shares Fair value Cost
---- ---------------- ---------- ----
<S> <C> <C> <C>
1999 16,868 $1,086,821 $569,797
1998 6,089 286,235 188,628
</TABLE>
NOTE 5 - TRANSFER OF PLAN ASSETS:
Plan assets of approximately $446,000 were transferred from the
DataExchange, Inc. 401(k) Plan into the Plan in 1999 in connection with the
1998 merger of the Company and DataExchange, Inc.
Total Plan assets of approximately $257,000 were transferred from the
MicroEdge 401(k) Plan into the Plan in 1998 in connection with the merger of
the Company and MicroEdge, Inc.
NOTE 6 - PLAN TERMINATION AND/OR MODIFICATION:
The Company intends to continue the Plan indefinitely for the benefit of
its eligible employees; however, the Company reserves the right to terminate
and/or modify the Plan at any time for any reason subject to the provisions
of ERISA. In the event that the Plan is terminated in the future,
participants immediately would become fully vested in their accounts.
NOTE 7 - SUBSEQUENT EVENT:
As of May 31, 2000, Plan assets have decreased in value since December
31, 1999, by approximately $760,000 due to market fluctuations.
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements on Form S-8 (No. 333-79553 and No. 333-79573) of Advent Software,
Inc. of our report dated June 23, 2000, with respect to the financial
statements of the Advent Software, Inc. Profit Sharing and Employee Savings
Plan included in this Annual Report on Form 11-K.
/s/ Mohler, Nixon & Williams
---------------------------------
MOHLER, NIXON & WILLIAMS
Accountancy Corporation
Campbell, California
June 23, 2000
SIGNATURE
THE PLAN. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit
plan) have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
ADVENT SOFTWARE, INC.
PROFIT SHARING AND
EMPLOYEE SAVINGS PLAN
Date: June 23, 2000 By /s/ PATRICIA VOLL
------------------------------
Title: on behalf of the Administrator
of the Advent Software, Inc.
Profit Sharing and Employee
Savings Plan
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